Exhibit (10)(t)
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment and Noncompetition Agreement ("the Agreement") is made this 26th
day of September, 1995 by and among XXXXXX COMMUNICATIONS, INC., a Minnesota
corporation, its heirs, assigns, successors, or surviving corporation that
results from a merger ("Company") and XXXXXX X. XXXXXXX, an individual who
currently resides in Hopkins, Minnesota (hereinafter referred to as the
"Employee").
RECITALS
WHEREAS, the Employee has served as a key employee of the Company for many
years and on the date hereof holds the position of President/Chief Operating
Officer, and has been selected by the Board of Directors of the Company to
receive the title and responsibility of Chief Executive Officer subject to a
successful transition; and
WHEREAS, the Company desires to retain the services of the Employee in
order to assure continuity of management and to assist the Company in operating
the business, and the Employee desires to be retained by the Company for such
purposes upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the promises and
mutual covenants set forth in this Agreement, the Company and the Employee agree
and contract as follows:
1. EMPLOYMENT SERVICES. The Company hereby employs the Employee to serve as
President with responsibility for managing the Company's businesses of the Video
Tape Duplication Division (currently at approximately $55 million in revenue and
500 employees) and its national (currently 18 location) scope, the Broadcast
Rental Division (currently at approximately $1.2 million in revenue and 12
employees), (the "Services"). It is understood that regardless of
whether the Company shall continue as a separate corporate entity or through
acquisition, merger or other transaction no longer be a separate legal
entity, that Employee as to these businesses, shall have the duties,
responsibilities and authority substantially the same as those of a
President/Chief Operating Officer of a business corporation pursuant to the
Minnesota Business Corporations Act except as may be determined by provisions
of this Agreement. It is further understood that the particular businesses
of the Company managed by Employee as President/Chief Operating Officer may
change from time to time, and Company and Employee agree that such changes
may occur, as long as the duties, responsibilities and authority are
substantially equivalent to those described herein, or Employee consents in
writing to such new duties, responsibilities and authority, which consent
Employee will not unreasonably withhold. Employee hereby agrees to provide,
and to hold himself available to provide the Services as his full-time
occupation to the exclusion of other full or part time services to any other
party during the term of this Agreement, except such other part-time services
rendered by Employee during nonworking hours, including during nights and
weekends, or while on personal leaves or vacation. The Employee hereby
accepts such employment and shall in good faith perform, for and on behalf
and in the best interests of the Company, the Services during the term of
this Agreement.
2. TERM. Except as provided in Section 4 hereof the initial term of this
Agreement shall be three (3) years commencing on the Effective Date hereof
September 26, 1995, and thereafter beginning with the third anniversary of the
Effective Date, September 26, 1998, will automatically renew each year on the
anniversary of that date for additional one (1) year terms, unless 90 days
preceding such third anniversary date and each subsequent anniversary date for
successive one-year terms, either party gives written notice to the other of
nonrenewal, in which case no further automatic extensions shall occur.
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3. COMPENSATION/BENEFITS. During the initial and subsequent renewal terms of
this Agreement, the Employee shall receive compensation from the Company for the
Services set forth in Section 1 as follows:
(a) BASE SALARY COMPENSATION. In consideration of Employee's services,
Employee will be paid, during the initial term of this Agreement, no less than
the following: $120,000 for calendar year 1996; (the "Salary"). The Salary
will be payable in accordance with the Company's customary payroll practices for
its executive officers, but not less than monthly. The Employee's Salary shall
be reviewed by the Company and the Employee at least annually for increase
consistently with general compensation changes Company-wide and applicable to
the executive officers as a group.
(b) CAR ALLOWANCE. The Company agrees to pay the Employee a car allowance
of no less than $4,800 annually, payable in accordance with the Company's
payroll practices but not less than monthly.
(c) BONUS. The Company will continue to offer Employee a bonus
compensation program substantially in parity with that offered to all other
senior executives of the Company, and including the use of substantially similar
percentage of salary, minimum, target and maximum bonus amounts, or performance,
achievement, and other standards.
(d) STOCK OPTIONS. The Employee shall be entitled to receive such stock
options as are available and offered from time to time to other senior
executives of the Company consistent with Company Policy.
(e) EXPENSE REIMBURSEMENT. The Company agrees to reimburse the Employee
for all reasonable and necessary business expenses incurred by the Employee
during the performance of his Services pursuant to this Agreement. The Employee
agrees to provide to the Company
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reasonable and customary documentation of any expenses for which the Employee
seeks reimbursement from the Company pursuant to this Agreement.
(f) OTHER Benefits. The Employee shall be entitled to participate in such
compensation and retirement plans and receive such insurance, vacation, profit
sharing, retirement, and other benefits ("Other Benefits") as are available to
senior executives of the Company consistent with Company policy, provided
however, during Employee's employment under this Agreement, Employee shall be
provided and receive at least such other benefits as he is provided and receives
as of the Effective Date of this Agreement, or in lieu thereof such substitute
plans and benefits as provide him with substantially equivalent Other Benefits.
4. TERMINATION. This Agreement may be terminated only on the terms and
conditions specified in this Section upon the prior written notice to the other
party as specified below. In the event of the termination of this Agreement,
the Employee shall be entitled to compensation in accordance with the following
provisions.
(a) TERMINATION BY COMPANY FOR CAUSE. The Company may terminate this
Agreement for "Cause," as defined below, immediately upon written notice to
Employee, and upon such termination for Cause, Employee shall cease to provide
Services hereunder as directed by the Chairman of the Board of Directors upon
receipt of notice of termination, provided that Employee may not be required to
continue Services without compensation or for more than 60 days following such
notice of termination, without his written consent thereto, provided further
that if the matter must first be determined by arbitration or is subject to cure
by the Employee compensation will be continued until such determination or
failure to cure takes effect as termination. "Cause" shall be defined as (i) a
breach by the Employee of the noncompetition provisions set forth in Section 5
hereof or the restrictions on use of Confidential Information set
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forth in Section 6 hereof or substandard performance of a material part of
the Services as required in Section 1 hereof as determined by a panel of
three arbitrators of the American Arbitration Association in Minneapolis,
Minnesota mutually chosen by Employee and Company and after written notice of
such alleged breach by Company to Employee and Employee's failure to cure
such alleged substandard performance or such alleged breach within 30 days
thereof (if such alleged breach is subject to cure), or (ii) willful and
gross theft by the Employee from the Company, or (iii) conviction of the
Employee of any crime punishable as a felony.
(b) TERMINATION BY COMPANY OTHER THAN FOR CAUSE OR NON-RENEWAL BY THE
COMPANY. In the event the Company terminates this Agreement other than for
Cause or the Company elects to not renew the term of this Agreement pursuant to
Section 2 hereof the Company will pay as a severance consideration payable
monthly at the rate in effect prior to termination all of the following: (i)
all Salary for the unexpired term of the Agreement in accordance with the
provisions of Section 3(a) above; (ii) all car allowance for the unexpired term
of the Agreement in accordance with the provisions of Section 3(b) above; (iii)
a bonus equal to one-fortyeighth (1/48) of the sum of the bonus payouts made in
the preceding three (3) years plus bonus due at the end of the year in which
termination occurs, estimated during the year and adjusted at year end, times
the number of months remaining in the unexpired term of the Agreement; (iv) as a
lump sum, all expense reimbursements due the Employee or submitted by the
Employee to the Company within 15 days after the notice of termination in
accordance with the provisions of Section 3(e) above; and (v) a severance
payment which, when added to 4(b) (i), 4(b)(ii), and 4(b)(iii) above, will equal
one year's compensation amounting to the sum of the annualized amounts of items
4(b)(i), plus 4(b)(ii), plus 4(b)(iii) above.
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(c) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may terminate
this Agreement for "Good Reasons," as defined below, upon ninety (90) days'
written notice to the Company. In the event Employee terminates this Agreement
for "Good Reason," the Company will pay monthly at the rate paid prior to
termination all of the following: (i) all Salary for the unexpired term of the
Agreement in accordance with the provisions of Section 3(a) above; (ii) all car
allowance for the unexpired term of the Agreement in accordance with the
provisions of Section 3(b) above, (iii) a bonus equal to one-fortyeighth (1/48)
of the sum of the bonus payouts made in the preceding three (3) years plus bonus
due at the end of the year in which termination occurs, estimated during the
year and adjusted at year end times the number of months remaining in the
unexpired term of the Agreement; (iv) all expense reimbursements due the
Employee or submitted by the Employee to the Company within 15 days after the
notice of termination in accordance with the provisions of Section 3(e) above;
and (v) a severance payment which, when added to 4(b) (i) 4(b)(ii), and
4(b)(iii) above, will equal one year's compensation amounting to the sum of the
annualized amounts of items 4(b)(i), plus 4(b)(ii), plus 4(b)(iii) above. As
used herein, "Good Reason" shall be defined as: (i) a diminishment of
Employee's responsibilities, duties and authority as provided in this Agreement;
(ii) a reduction in the Employee's Salary or Bonus as provided this Agreement;
(iii) the failure by the Company to provide Employee with all plans, programs or
other benefits of the Company in accordance with Section 3(b), (d), (e) and (f);
(iv) relocation of Employee's office outside of the seven (7) county
Minneapolis/St. Xxxx metropolitan area; (v) failure of any successors, assigns,
or surviving corporation or entity to assume and faithfully perform all of the
obligations of the Company under this Agreement as provided in Section 7(h)
hereof; or (vi) the Company commission of any other material breach of
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this Agreement, which is not remedied by the Company in a reasonable period
(but not less than ninety (90) days) after its receipt of written notice
thereof from Employee.
(d) TERMINATION FOR DISABILITY OF EMPLOYEE. In the event that the
Employee becomes totally disabled, the Company may terminate the Agreement, and
the Employee shall receive all of the Compensation and Benefits described in
Section 3 hereof for one hundred eighty (180) days after notice of termination
is delivered to Employee.
(e) TERMINATION FOR DEATH OF EMPLOYEE. In the event of the death of the
Employee, the Agreement will automatically terminate and no compensation will be
paid from the date of death except that expense reimbursements and earned but
unpaid bonus compensation will be paid to the Employee's estate.
(f) TERMINATION BY EMPLOYEE OTHER THAN FOR GOOD REASON. The Employee may
terminate this Agreement upon sixty (60) days written notice to the Company.
Compensation provided under Section 3 above will cease upon such termination.
(g) TERMINATION NOT TO AFFECT NONCOMPETITION PROVISION. The termination
of this Agreement, by either party hereto, shall not affect the prohibition on
competition by Employee set forth in Section 5 hereof.
5. NONCOMPETITION. Employee agrees that, during the term of this Agreement
and the five (5) year period following the termination of this Agreement, the
Employee will not directly or indirectly, alone or as partner, officer,
director, advisor, consultant, or employee of any other company or entity,
engage in any, commercial activity in competition with any part of the Company's
business in those states in which the Company conducted business during the term
of this Agreement or as of the date of such termination of this Agreement, or
with any part of the Company's contemplated business with respect to which the
Employee has Confidential
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Information as defined below and governed by Section 6 hereof. In addition,
the Employee recognizes that the Company's work force constitutes an
important and vital aspect of its business. The Employee agrees that during
the term of this Agreement and for the five (5) year period following the
expiration or termination of this Agreement (whether terminated early,
whether for cause or not for cause), he shall not solicit, or assist anyone
else in the solicitation of any of the Company's then current employees to
terminate their employment with the Company and to become employed by any
other business enterprise.
6. CONFIDENTIAL INFORMATION. The Employee will not, during or following the
termination of this Agreement, for any reason use or disclose, other than in
connection with rendering of Services hereunder on behalf of the Company, any
Confidential Information to any person not employed by the Company or not
authorized by the Company to receive such Confidential Information, without the
prior written consent of the Company. "Confidential Information" means
information that is proprietary to the Company or proprietary to others and
entrusted to the Company. Confidential Information includes, but is not limited
to, customer lists, information relating to business plans and to business that
is conducted or anticipated to be conducted, and to past or current or
anticipated products. Confidential Information also includes, without
limitation, information concerning research, development, purchasing,
accounting, computer software, selling, and services. The Employee will use
reasonable and prudent care in following written Company procedures or
instructions furnished to Employee to safeguard and protect and prevent the
unauthorized use and disclosure of Confidential Information. The obligations
under this Section 6 will not apply to (i) any Confidential Information that is
now or becomes available to the public through no breach of the Employees'
obligation of confidentiality; or (ii) the Employee's disclosure of any
Confidential Information required by law or judicial or
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administrative process. ubject to the requirements of the Securities Exchange
Act of 1934, nothing herein shall create a contractual restriction of
Employee's ability to sell, purchase, or effect transactions in the Company's
securities.
7. MISCELLANEOUS
(a) MODIFICATION. This Agreement supersedes all prior agreements and
understandings between the parties relating to the subject matter herein. No
modification, termination or attempted waiver of any provision of this Agreement
shall be valid unless in writing signed by the party against whom enforcement is
sought.
(b) ENFORCEABILITY AND SEVERABILITY. If any term of this Agreement is
adjudicated to be void, voidable, invalid or unenforceable for any reason, such
term shall be automatically severed from all other terms of this Agreement,
which will continue in full force and effect. In the event any term is
adjudicated to be overbroad as written, such term shall be automatically amended
to narrow its application to the extent necessary to make such term enforceable.
(c) GOVERNING LAW. This Agreement and all remedies at law or in equity
shall be construed and in force in accordance with the laws of the State of
Minnesota.
(d) PREVAILING PARTY. The prevailing party in any suit, proceeding,
hearing or arbitration shall be entitled to recover from the non-prevailing
party all costs that the prevailing party has incurred as a result of the suit,
proceeding, hearing or arbitration, including, without limitation, reasonable
attorneys' fees, filing fees, arbitrator's fees, expert witness fees, travels
costs, and all other reasonable costs and expenses incurred in the enforcement
of this Agreement. In the event that neither party shall prevail on all of its
claims or all of its defenses, then such costs and expenses shall be allocated
and awarded between the parties as determined by the arbitrator or the court.
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(e) NOTICES. Any Notice or other communication required or permitted
under this Agreement shall, in order to be effective, be in writing and be given
by personal service or by prepaid, certified United States Mail or Federal
Express Courier, return receipt requested, addressed to the applicable party at
the address for such party set forth on the signature page of this Agreement.
Notice by service is effective upon service and notice by mail or courier is
effective upon mailing. Either party may change the address to which notices
for such party are to be sent by so notifying the other party in the manner set
forth above.
(f) CAPTIONS. The captions and headings contained in this Agreement are
for convenience only and do not define, limit, construe, or give full notice of
the contents of the provisions of this Agreement.
(g) ARBITRATION. Any controversy or claim arising out of this Agreement,
or any breach thereof, shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association and
judgment upon the award may be entered in any court having jurisdiction. Any
such arbitration shall be in the State of Minnesota in the seven-county Twin
Cities' metropolitan area. In the event the Company shall dispute and submit to
arbitration hereunder the Employee's claims regarding the renewal of this
Agreement pursuant to Section 2 hereof, or the termination of this Agreement
pursuant to Section 4 hereof, or the amounts to be received by the Employee
under Section 4 hereof, and the Company shall withhold from Employee the
payments or benefits provided under Section 4 hereof, the Company shall continue
to provide Employee with all compensation and benefits, at his then current
level, until an award in arbitration is rendered, and, if requested by the
Chairman of the Board of Directors, the Employee shall be obligated to continue
his employment, perform any services for, and be present at the Company.
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(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company, its successors and assigns, and any corporation or entity with which
the Company may be merged or by which its assets, stock, operations, business,
ownership or control are acquired, and any such corporation or entity, as a
condition to the completion of such transaction with the Company, shall
absolutely, unconditionally and expressly in writing assume all of the Company's
obligations to faithfully perform this Agreement, and the Employee shall be
provided with a copy of such written assumption agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
effective as of the date first set forth above.
XXXXXX COMMUNICATIONS, INC. EMPLOYEE
By /S/ X.X. Xxxxxxxx /S/ Xxxxxx X. Xxxxxxx
---------------------------- ----------------------------
Its CEO Xxxxxx X. Xxxxxxx
----------------------------
0000 Xxxx 00xx Xxxxxx 000 Xxxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
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